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Mike Ricciuti

Staff Writer, CNET

Microsoft plans to release in December new software designed to secure instant messaging and other communications within big companies.

The Redmond, Wash., company said Tuesday that its Live Communications Server 2005 software will let companies encrypt their instant-messaging communications internally and link IM systems between companies so that suppliers and other business partners can share secure IM connections.

Additionally, Live Communications Server, or LCS, will include an option for letting companies link to public instant-messaging networks from Microsoft, America Online and Yahoo, so that employees can chat with users on the Big Three IM services.

The extra-cost option won’t be available until the first half of next year, however.

LCS has become a cornerstone of Microsoft’s efforts to expand its Office line beyond a mere collection of productivity applications. By integrating LCS into Office, Microsoft hopes to imbue a variety of applications–especially its Outlook e-mail software–with “presence,” or the ability to intelligently route communications based on a worker’s location or availability.

Presence works by using information in people’s applications to know their whereabouts. For example, if Outlook’s calendar shows that a person is in a meeting, it can route voice calls to that person’s cell phone. Or if someone sends an IM to a user, the software can then prompt a Net phone call and record a voice message.

LCS may be the first step toward enabling what analysts call a “secure cloud” for exchanging data between different systems to make presence work.

Microsoft said the new release of LCS will also improve secure remote access to presence and instant-messaging capabilities, using standard firewall ports instead of virtual private network, or VPN, connections.

Last week, Microsoft announced new corporate instant-messaging client software, code-named Istanbul. The software resembles the Windows Messenger software that’s currently found in Windows XP. The difference is that, with Istanbul, a user’s IM information is synchronized with Outlook’s calendar and scheduling information. Istanbul also connects to desk phones and serves up an alert when someone calls.